Lord Mayor: As the capital of Europe, we must stay in EU

London is the financial capital of Europe, and must maintain strong links with the Continent to keep pace with rivals such as New York and Hong Kong, the Lord Mayor warned today.

Roger Gifford, a former City banker, said the Square Mile’s best interests will be served if the UK stays within the European Union. However, he believes the 28-member bloc needs reforming and welcomed The Evening Standard’s debate on the subject on Monday, for which he is making opening remarks.

“Throughout its history, London has been able to absorb different people, races, cultures and religions and make them work together in a trading environment. I think that’s as true today as it has ever been,” he said.

“When it comes to Europe, I think it’s better to be as open as we possibly can with all European countries, rather than having trade barriers between us. And it will be much better to be part of the discussion and have some influence over the future of Europe than none at all.”

Gifford was appointed as London’s 685th Lord Mayor last November, and will keep the role for another two months. Having travelled across the world promoting the City, he said London must heed lessons from other financial centres.

“Look at New York as an example. Its primary market is the United States while 80% of our business is international, and our hinterland is Europe. In the same way that New York doesn’t have barriers with other states when it comes to trading, we don’t want barriers between us and other parts of Europe. It’s a simple analogy in a way, but it’s also why New York has been able to develop as such a strong market.”

Critics of the EU have often picked out immigration and bureaucracy as two of their major concerns. On both of these issues, Gifford said politicians need to do some “perception work” and some “real work”.

“On immigration, I believe in what the Government is doing on getting the benefits system right in order to deter benefit immigration,” he said. “We kid ourselves if we think that we have not benefited from immigration, and I would like to see London leading the charge as being pro-immigration because we have benefited from it so much over the centuries.

“All of us feel that the European legislature has tended to produce more bureaucracy than we’d like to see. Cutting through needless red tape should be a major priority for those driving the pro-European argument, so we can change the image of regulation to something that is protective rather than restrictive. If we were not part of the EU, we would still be complying with 70% of all the legislation there in order to trade with its members — why not be inside affecting that, rather than outside?”

With a referendum on the UK’s membership of the EU expected after the next General Election, the Lord Mayor said the City must also consider the implications of life outside the EU.

“I feel the City will thrive whatever happens because it’s a pragmatic place,” he added. “However, if we were to consider leaving, then [we must consider] the terms of that disengagement and the effect on the agreements that we have in place today covering such issues as movements of capital and, for instance, where euro payments are settled. If there were to be restrictions in trading stocks and shares or commodities, it would be about seeing where new barriers and restrictions lay.

“The best thing is to have the debate, and that’s a role the City can help in. If there is going to be a pullback, what exactly will it look like? If we’re going to stay, what do we need to do?

“But we are currently ‘pro-Europe, pro-reform’. There’s a desire here to try to make the marriage work. We can do that at the same time as developing business in Latin America, Asia. We should be using our relationship with Europe as a springboard for trade with the rest of the world. The City is Europe’s capital not just the UK’s.”